Premium = the amount you pay each month for the benefits of a health insurance plan.
Advance Premium Tax Credits (APTCs) = the Affordable Care Act provides eligible consumers with the option of receiving assistance with paying health insurance premiums using tax credits in advance of filing their income tax return for the year. In order to receive these credits in advance, a consumer must agree to file a tax return for the year on or before April 15 (or October 15 if an extension is obtained). Failure to file a federal income tax return will result in the consumer having to repay all of the tax credits received by their health insurance company.
Deductible = the amount of health care expenses you pay for 100% before the insurer pays some or all of your additional expense (deductibles precede coinsurance, and may exclude copays). Not all health plans include a deductible (there are no deductibles in the Gold or Platinum level plans). But there are now two different types of deductibles, and only one will apply to the health plan you select:
- INDIVIDUAL deductible = this is the type of deductible described in general above . . . beginning with the first dollar of covered expenses, you will pay 100% of those expenses until you have reached the deductible amount (which could be as much as $5,000 for one person, or $10,000 for a family of two or more)
- MEDICAL deductible = when a health plan has a medical deductible, only certain health care expenses may be subject to the deductible, such as emergency room, hospitalization, diagnostic imaging (MRI, CT scans, PET scans, etc.), and various outpatient surgical and other procedures.
Copayment (Copay) = a fixed-dollar amount (such as $20 or $30) paid to a health care services provider for an exam, treatment, or diagnostic test each time you receive a service.
Coinsurance = a stated percentage of each health care expense paid for by both the insurance company and the insured (such as 80/20, 70/30, 60/40, 50/50, with the insurer paying the larger portion).
Cost sharing = a person's responsibility toward the total cost of their health care expenses. It includes the deductible, copays, and coinsurance, but does not include premiums.
Cost sharing reductions (CDRs) = many consumers whose "Modified Adjusted Gross Income" is between 138% and 400% of the Federal Poverty Line amount for the year are eligible to enroll in Silver tier health plans which reduce their out of pocket cost for health care expenses. These reductions may eliminate or reduce deductibles and significantly lower copays and coinsurance compared to both Gold and Platinum tier plans in some situations. Although the premiums for Silver tier plans do not change when a consumer is eligible for CSRs, a careful comparison of CSR benefits to those of plans with lower premiums should reveal substantially lower overall costs for health care when all out-of-pocket expenses are considered. Lower cost Bronze tier plans all have very high deductibles, copays, and Out-of-Pocket limits which can easily add up to more than the premiums paid for a Silver tier plan after accounting for APTCs, CSRs, and reduced Out-of-Pocket limits. A licensed insurance agent will help you make the right decision for your unique situation.
Formulary = the list of generic and name brand prescription medications which will be covered in full or in part after paying any deductible and/or copayment required by your selected health plan. If you have been prescribed medications for high blood pressure, cholesterol, diabetes, or other chronic conditions, before you select or change your health plan, be sure that your medications are listed in the insurance company's formulary -- if not, you will have to pay the full cost of the medication or your physician will have to prescribe a different drug. Some formularies are subdivided into "preferred" generic and name brand drugs, which will cost less. All formularies are readily available for review.
Medi-Cal = California's name for the federal-state partnership called Medicaid. Medicaid/Medi-Cal provides low or no-cost access to health care services to many persons whose incomes are below 138% of the Federal Poverty Line. Although consumers with incomes between 100% and 138% of the FPL may voluntarily opt-out of Medi-Cal and purchase private health insurance, they are not eligible for Premium Tax Credits to help pay the cost of premiums for private health insurance. Additionally, the cost of health care services provided to Medi-Cal beneficiaries confined in "institutional" care settings (skilled nursing, assisted living, or custodial care) or over age 55 whether confined or not, may be subject to "Asset Recovery" provisions under federal law. After a beneficiary dies, that person's estate, and/or potentially their heirs, may be required to repay the state the lesser of 100% of the amount paid to health care providers or the value of the decedent's estate (after funeral expenses). The rules have become much more complex, and professional or legal guidance may be necessary. You can obtain more information from the State of California Department of Health Care Services by clicking on the link below:
Network = when choosing an HMO, PPO, or EPO health plan, you need to know whether your existing health care providers are contracted with an insurance company as part of its network. In an HMO or EPO plan, you must only use the network providers in order for your insurance company to pay some or all of your health care expenses. In a PPO plan, you may use the services of any licensed health care provider, but your out-of-pocket cost will be lowest if you use those providers who have contracted with your insurance company. If you have an existing relationship with a physician or other provider, always check the provider directory of your insurance company to make sure your provider is in the network. Your providers are not always contracted with the same insurance companies from one year to the next, so before enrolling or reenrolling in a health plan, check the provider directories.
Out-of-Pocket Limit = the maximum annual amount of a person's total cost sharing. Expenses for the year beyond the out-of-pocket limit are paid by the insurer (this limit "resets" at the beginning of a plan or calendar year. All deductibles, copays, and coinsurance payments -- but NOT premiums -- will accrue toward the annual Out-of-Pocket Limit. If you enroll in a "PPO," you can use any health care providers of your choosing, but if you choose a provider who is not in "the network," you will also have higher deductibles, copays, coinsurance and a higher Out-of-Pocket limit.
THE AFFORDABLE CARE ACT and YOU
Open enrollment for 2016 begins on November 1, 2015, but . . . you may be eligible for a "Special Enrollment Period" before then.
If you experience a "Qualified Life Event" -- such as losing group health insurance, getting married or divorced, having a new child born or adopted into your family, or moving into or within California (and out of your existing health insurance region), then you will have a 60-day window of opportunity, beginning with the day of the qualifying event, to enroll in a health insurance plan (everyone in the household is eligible to enroll, if lawfully present in the U.S.). This window of opportunity is called a "SPECIAL ENROLLMENT PERIOD."
Open enrollment for 2016 runs from November 1, 2015 through january 31, 2016
Beginning January 1, 2014, additional changes to the heath insurance industry in the United States took effect as a result of the Patient Protection and Affordable Care Act of 2010 ("ACA"). Additionally, some important facets of the law will NOT be implemented until at least January 1, 2016. One of the most important changes is that no one can be turned down ("declined") or rated "substandard" for health insurance, regardless of his or her past or present health conditions. Men and women cannot be charged different rates for insurance, but everyone will pay a premium based on age and whether or not they use tobacco products (The PPACA allows tobacco users to be charged an additional 50% of the premium for their plan, but California law prohibits insurers from doing this -- all persons pay the same rate based only on the plan they choose and their age). The premiums for persons age 64 or older cannot be more than three times the premiums for persons age 21. Family premiums will be based on the individual premium for each covered person age 21 or older (a "child" may choose to remain covered under a parent's health plan to age 26, even if married), plus the premiums for the three oldest children under age 21.
However, this still does not mean that health insurance will be "affordable" for everyone. There is a new requirement that most persons must be covered by a qualified health insurance plan (QHP) that provides the minimum value and all "essential health benefits", or face the loss of tax credits, and even be exposed to a "shared responsibility payment" payable to the IRS. Many low income persons and/or their children will be eligible for enrollment in Medi-Cal, California's version of the federal Medicaid program, and will not have to purchase health insurance or pay any penalties. At the time you submit an eligibility application through the Covered California exchange, your eligibility for Medi-Cal will be determined, and if eligible, the application will be referred to the Medi-Cal agency for final determination of eligibility.
Employer-sponsored plans in California are required to offer coverage for spouses if they offer coverage for children. An employer-sponsored health plan is considered "affordable" if the employee's "self-only" cost is not more than 9.5% of their household income, and a person is eligible for a waiver from the mandate to be insured if the cost of the lowest priced individual "bronze" QHP available is more than 8% of household income.
ALL QHPs MUST PROVIDE THE ESSENTIAL HEALTH BENEFITS
The Affordable Care Act specifies ten essential health benefits that individual and employer-sponsored health plans must cover. Although subject to "cost sharing" (deductibles, copays, and coinsurance -- which will vary according to the design of each plan and the plan "tier"), preventive health services, which include annual wellness appointments, certain women's health services including mammograms, prostate cancer screening for men, colorectal exams for persons over age 50, and certain pediatric and teen health services, must be provided without cost sharing. The ten EHBs are:
- ambulatory patient services
- emergency services
- maternity and newborn care
- mental health and substance use disorder services (including behavioral health treatment)
- prescription drugs
- rehabilitative and habilitative services and devices
- laboratory services
- preventive and wellness services and chronic disease management
- pediatric services, including dental and vision care
When standalone dental plans for children are offered through the Exchange, those services do not have to be included in a QHP. Adult dental services may only be offered by standalone dental plans. There are very few things not covered in the list of EHBs, but among those which are not are "cosmetic" services which are not medically necessary, such as elective cosmetic surgery and laser-assisted vision correction procedures.
DON'T BECOME A VICTIM OF MISREPRESENTATION or FRAUD
Because of the confusion surrounding implementation of the ACA, consumers are going to be exposed to a variety of misrepresentations and possible fraud in their search for "affordable" health insurance. Persons may misrepresent themselves as "Navigators", "Assisters", or "Certified Enrollment Counselors", or even licensed insurance agents, in order to gain access to personal information. I want to try to protect you from these scam artists by providing the following important tips.
HOW YOU CHOOSE TO ENROLL IN A QHP IS UP TO YOU
You don't have to meet with anyone face-to-face to enroll in a health insurance plan. You could meet with a licensed insurance agent, a Navigator, Assister, or Application Counselor, or attempt to do it yourself. Many public venues such as libraries, city or county government offices, and some police or fire stations may make computers available to the public for the purpose of enrolling in a QHP. Enrollment Assisters may be present at some of these locations to help consumers complete the online eligibility application.
Computer-savvy persons may submit their applications electronically via the Covered California website, and enrollment may be completed over the telephone if you have difficulty enrolling on your own online. BUT WAIT!! No uninvited solicitations for health insurance should ever be accepted over the telephone! At least not unless you, the consumer, made or requested the phone call. I am already aware of one telephone scam in which the caller claims to be from a person's bank or credit card company, wants to verify the card number or account information, and then offers to sell the person health insurance, if they just agree to have the premium paid by the credit card or direct debit from a checking or savings account. DON'T BECOME A VICTIM OF SCAMS LIKE THIS!! Hang up immediately without giving any information. Your bank or credit card company knows your account information, will never ask for your PIN number, and, trust me, does not sell health insurance. Navigators, Assisters, Enrollment Counselors, and insurance agents will not ask you for premium payments (but may ask for credit card or bank account information for electronic payment processing) -- but your enrollment in any health insurance plan will not be complete until your first payment is made.
No one can charge you money to help you choose or enroll in a qualified health insurance plan.
Navigators and Assisters are compensated for their services by their employers through grants funded by the federal government. Insurance agents usually receive commissions from insurance companies for enrollments, and must disclose this fact to you. Agent commissions are factored into the cost of all QHPs and are not added to the cost of your insurance -- the cost of health plans offered by an insurance agent through the Exchange are exactly the same even when purchased off the Exchange, when enrollment is completed on one's own, or through a Navigator, Assister, or Certified Enrollment Counselor.
The advantage of using a licensed insurance agent is his or her expert knowledge of health insurance.
Licensed agents are the only persons who can lawfully recommend the plan(s) which meet your specific needs. Ask for the agent's license number and check it here
YOU PAY INDIVIDUAL INSURANCE PREMIUMS DIRECTLY TO INSURANCE COMPANIES . . . ONLY!! (never to insurance agents or Navigators or the Exchange)
When you choose to enroll in a QHP, you will either decide to make your premium payments electronically or by mail. Electronic payments may be made via credit card, automatic withdrawal from a checking or savings account, or for employees in group plans, via payroll deduction. Direct payments by mail can be made with a check, money order, or cash (but mailing cash is never a good choice). If you are eligible for premium tax credits, you may choose to have those credits paid directly to your QHP and will only need to pay the balance of your premium (or you may choose to receive the credits when you file your 2014 federal income tax return). However, in order to receive premium tax credits in advance or when filing your tax return, you MUST enroll in a health plan through the Covered California exchange.
As a general rule to protect yourself, never provide bank account credit card or other financial information to anyone you do not know or trust, and when it comes to buying any type of insurance, to anyone who cannot show you proof of their California insurance license. Navigators, Assisters, and Enrollment Counselors are not licensed insurance agents, but they must be certified by the Covered California Exchange, and should be able to show your their certification on request. Certified Enrollment Counselors are most likely to be encountered in health clinics, hospitals, and doctors' offices, and will not be contacting people by telephone (unless requested). Navigators and Assisters, as well as licensed agents, might make enrollment information available at a local pharmacy, department store, or even in public, non-patient care areas of a hospital or urgent care center.